The Pentecostal Credit Union - 36th Annual General Meeting
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Transcript of The Pentecostal Credit Union - 36th Annual General Meeting
36th Annual General Meeting
The PentecostalCredit Union Ltd
from 6pm19 March 2016
venue TootingNeighbourhood Centre28 Glenburnie RoadLondon SW17 7PJ
AGM agenda
1. Welcome
2. Prayer
3. Hymn: Standing on the Promises
4. Scripture: Psalm 16: Vs. 8-11
5. Apologies
6. Minutes of last AGM: 14 March 2015
7. Matters arising
8. Directors’ report to the membership
9. Loan report
10. Audit Committee report
11. Nominations for the Board
12. PCU Financial Statements
• Directors’ report and recommendation of dividend
• Independent auditor’s report
• Accounts
• Appointment of auditor
13. Raffle
14. Close: With a word from the founder – Rev. Carmel Jones
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Prayer: St Francis of AssisiLord, make me an instrument of Thy peace;
Where there is hatred, let me sow love;
Where there is injury, pardon;
Where there is error, truth;
Where there is doubt, faith;
Where there is despair, hope;
Where there is darkness, light;
And where there is sadness, joy.
O Divine Master, Grant that I may not so much seek
To be consoled as to console;
To be understood as to understand;
To be loved as to love.
For it is in giving that we receive;
It is in pardoning that we are pardoned;
And it is in dying that we are born to eternal life.
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Standing on the promisesStanding on the promises of Christ my King,
Through eternal ages let His praises ring,
Glory in the highest, I will shout and sing,
Standing on the promises of God.
Chorus
Standing, standing,
Standing on the promises of Christ my Saviour;
Standing, standing,
I’m standing on the promises of God.
Standing on the promises that cannot fail,
When the howling storms of doubt and fear assail,
By the living Word of God I shall prevail,
Standing on the promises of God.
Chorus
Standing on the promises I now can see
Perfect, present cleansing in the blood for me;
Standing in the liberty where Christ makes free,
Standing on the promises of God.
Chorus
Standing on the promises of Christ the Lord,
Bound to Him eternally by love’s strong chord,
Overcoming daily with the Spirit’s sword,
Standing on the promises of God.
Chorus
Standing on the promises I cannot fall,
Listening every moment to the Spirit’s call
Resting in my Saviour as my all in all,
Standing on the promises of God.
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Scripture: Psalms 16: 8-11I keep my eyes always on the Lord.With him at my right hand,I will not be shaken.
Therefore my heart is glad and my tongue rejoices;my body also will rest secure,
Because you will not abandon me to the realm of the dead,nor will you let your faithful one see decay.
You make known to me the path of life;you will fill me with joy in your presence,with eternal pleasures at your right hand.
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Held on Saturday 14 March 2015 at 28 Glenburnie Road,London SW17 7JP
Directors presentLeslie Laniyan (Chair)
Chona Labor (Vice Chair)
Patricia Toussainte (Secretary)
Tracey Connage (Director)
Lorna Lynch (Director)
Verona Richards (Director – Co-opted)
Michael Mathura (Director)
Ann Waugh (Chair, Audit Committee)
Staff in attendanceMr H Boatswain (Interim CEO)
Mr S Bowes (Operations Manager)
Ms L Humphris (Finance Administrator)
Ms E Bowes (Executive Assistant and Minute Taker)
Minutes of the 35th Annual GeneralMeeting of the Pentecostal Credit Union
WelcomeThe AGM convened at 6.30pm. Mr Leslie Laniyan, the Chair of the PCU,presided over the meeting and welcomed the members.
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Prayer, hymn and scripture readingThe Chair introduced the Rev. Verona Richards, Co-opted Director, andinvited her to facilitate the ‘praise and worship’ opening session. Rev.Richards opened with a prayer and lead the membership in the hymn –‘How Great Thou Art’.
ApologiesThere were no apologies.
Minutes of the last meetingMrs Patricia Toussainte, Secretary of the credit union, read the minutes ofthe last meeting. Mrs Shirley Williams proposed that the minutes beaccepted as a true record of events. Mr Anthony Bartley seconded theproposal. The minutes were accepted with no changes or challenges.
Matters arisingThe Chair highlighted progress on the PCU Business Plan objective toincrease the membership. Progress had been very slow and the targetshad not been met. The Chair appealed to the membership to do whatthey could to help. He invited Shane Bowes, Operations Manager, tospeak further on this.
Mr Bowes said that the PCU had initiated a ‘Refer a Friend’ schemewhere members who referred five people would receive £25. To date,no-one had taken this up. Pastor Noel Brown said he was a very greatsupporter of the PCU and much in favour of growing the membership.He commented that there should be a particular focus on younger people.
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The Chair asked the Rev. Jones to report back on the Equiano BenevolentScheme (EBS). The membership agreed a donation to this charity at theAGM in 2013. The Rev. Jones responded that EBS had progressed welland had helped numerous people. A full Annual Report would be madeavailable.
The Rev. Jones stressed that the EBS was there to help people in needand referred members wanting more information to the scheme’sleaflets. It was stressed that EBS is an independent scheme. People arehelped to open a credit union account and EBS funds are paid into theircredit union account.
Anthony Bartley asked why the funds had to go through a credit unionaccount and suggested that the allocation of funds seemed complicated.Shane Bowes explained that the purpose of EBS was to discourage peoplein need from using pay day lenders, encouraging them instead to open acredit union account. Dorothy McFarlane commented that she felt thiswas an excellent idea and that anything to help people in need to usetheir money wisely was a good thing.
Pastor Noel Brown offered that one thing pay day lenders do well is tocut the red tape and make things more simple. He felt that EBS shouldlook to make the process of funding more accessible and less complicated.The Rev. Jones added that he was very much in favour of this and keento hear from anyone with ideas on how this might be achieved.
Other matters arising would be dealt with during the meeting.
Directors’ report to the membershipMrs Tracey Connage, Director, presented the directors’ report, highlightingthe following.
The annual Board strategic planning weekend in July 2014 had reviewedthe Business/strategic Plan, focusing particularly on:
• developing the PCU’s vision, mission and values, and• reviewing progress on the strategic objectives of growth, renewal and
improvement, and setting new targets for the coming year.
The PCU marketing strategy was now seen as a vital element of theBusiness Plan.
The PCU had developed an in-house Management Information Toolkit tomeasure business productivity against our strategic and financial targets.
There were plans to move towards digital products and services,following the commissioning of a market segmentation research report.
The PCU had taken part in the government’s Credit Union ExpansionProject (CUEP). The Department of Work and Pensions has contributed£38m towards the growth of credit unions in the UK.
The offices at 15 Oldridge Road in Balham would be refurbished.
Governance was improving and the Board of Directors were continuingto develop their expertise.
There were plans for the PCU’s 35th anniversary celebrations in 2015.
Mrs Connage concluded by acknowledging and thanking the membershipfor their continued prayers and support for the PCU. She then invitedquestions from the floor.
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Pastor Richards asked about progress on the high-profile legal case. TheChair responded that litigation was continuing, but that we expected toconclude this year.
Bishop Thomas asked about the cost of the office refurbishment. MrHugh Boatswain, Interim CEO, responded that this would be in theregion of £135,000. He continued that moving and renting was not anoption. Investing in the building and increasing the credit union’s assetbase were the best things to do. He noted that we had encounteredsome health and safety issues with the building, which were urgent, butwhich had increased the originally anticipated costs.
Pastor Noel Brown asked if the 35th Anniversary Celebration could beused as a way to attract new people to the credit union.
Mr Maynard Gordon asked how a young person such as himself couldbe part of the segmentation research project. Mr Bowes responded thatthe PCU are looking for volunteers for the focus group work and wantedyoung people to be part of that. Mr Gordon was asked to leave hiscontact details.
The Chair introduced Mr Chona Labor, Vice Chair, who delivered aPowerPoint presentation of the PCU Management Information Toolkit.He explained that the toolkit includes the PCU Business Plan strategy,risks, financial and management metrics. Mr Labor provided a flavour ofthe key points reported on and highlighted the ratios in:
• solvency• capital to assets • delinquency, and• corporate loans.
Mr Labor reported that we are within the regulatory limits in all but thecorporate loans ratio, where we are above the limit. However, this isimproving and trending towards the regulatory limit of 10% of the totalloan book. He re-iterated the earlier point made by the Chair about theneed to improve membership growth.
Mr Labor then invited questions from the floor.
Fay Gordon asked if the PCU owned its website. Mr Bowes respondedthat the website and software are owned by the PCU.
Shirley Williams asked if the toolkit was on the website. Other membersalso felt it would be useful to have website access to the ManagementInformation framework.
Pastor Noel Brown suggested that the PCU website could be linked tothe website of member churches.
Loan reportThe loan report was presented to the membership by the OperationsManager, Mr Shane Bowes. He reported that a total of £552,680 hadbeen allocated in loans between 1 October 2013 and 30 September2014. Mr Bowes explained that the Business Plan strategic target, set bythe Board in July 2014, was to make £60,000 worth of loans each month.
He went on to explain that the growth of the loan book, which is theultimate aim, is impacted by loan repayments and is part of the overallcalculations. However, this target has been achieved and exceeded sincethe beginning of 2015.
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Dorothy McFarlane asked if the £60,000 figure had to be achieved eachmonth or was there a yearly final target to which the monthly amountcontributes. Mr Bowes responded that there were variables over themonths and whilst the monthly targets are the operational objectives,ultimately the annual target must be met. He reminded the membershipthat the size of the loan book has an impact on dividends.
Report of the Audit CommitteeMs Ann Waugh, the Chair of the Audit Committee, presented her report.She began by explaining the role of the Audit Committee – which is tosafeguard the interests of the membership and to ensure that the Boardis compliant with legal and regulatory requirements. She furtherexplained that the Audit Committee works with an independentlycommissioned auditor, who audits the PCU’s operations in accordancewith an agreed Audit Plan. The Audit Committee is independent of theBoard and operates separately.
Ms Waugh then presented the results of the year’s audits. She concludedthat the PCU had a strong Board with good decision-making capacity.Board meeting attendance was very good at 93% throughout the yearand the regulator (the Prudential Regulation Authority) had indicatedsatisfaction with governance at the PCU.
From now on, the Audit Committee would be focusing on the delivery ofthe three strategic objectives of growth, renewal and improvement. Inaddition to this, the Audit Plan programmes the scrutiny of capitalinvestment, loans, marketing, risk assessment, staff and Boardcompetencies and key person risk.
Nominations for election to the BoardThe Rev. Verona Richards had been co-opted to the Board and was nownominated for election to the Board. She had been through the PCU’s‘Fit and Proper Test’ and had obtained approval from the FinancialConduct Authority in the form of Approved Persons Controlled Function 1.
The Rev. Richards was duly elected by the membership.
In addition, and in accordance with Rule 103, one-third of the Boardhad resigned and were seeking re-election. These directors were MichaelMathura and Chona Labor. These members were also duly re-elected.
There were no other nominations.
12. Rule changeElaine Bowes, the PCU’s Executive Assistant, explained the reason for theproposed rule changes. There were two proposals:
• To Rule 7: A change to the common bond rule to enable membershipof anyone who attends a Pentecostal Church in the UK and to complywith the Equality Act 2010, which the previous rule breached. Also,that the membership approve the delegation to the Board ofamendments to the appended bona fide list of Pentecostal churches,as necessary.
• To Rule 110: A change in the frequency of Board meetings frommonthly to bi-monthly.
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The Rev. Jones proposed the change to Rule 7. This was seconded by FayGordon. All were in favour. Fay Gordon proposed the change to Rule110. This was seconded by Dorothy McFarlane. All were in favour.
PCU financial statementsMr Shane Bowes, Operations Manager, presented the financialreports. In response to a question from Bishop Thomas about the rise inloan delinquency provision, he explained that the credit union mustmake a provision for existing loans and those that might go into baddebt. The bad debt provision had increased from £500,000 last year, tosome £900,000 this year. This was as a result of a combination offactors, including existing bad loans and the legal case.
There were no other questions. The membership accepted the accounts.
Dividend
A dividend of 1.% was recommended. It was recognised that this was areduction in the 1.5% dividend for 2014-2015. The Chair indicated thatwith the settlement of the legal case and recoup of the funds owed tothe PCU, there would be an improved dividend offer for 2015-2016.
The Rev. Dorrit Akinbobola asked if it were possible to predict thedividend for each year. Mr Bowes responded that this was not possiblewith any certainty. She also asked what investments the credit unionmakes. Mr Bowes explained the regulatory requirements with respect tocredit union investments and listed the institutions that the PCU currentlyhas investments with.
The proposal for a 1% dividend was made by Bishop Thomas. Themembership accepted this as the dividend for 2015-2016.
Appointment of the auditorMr Shane Bowes recommended that Thomas Westcott be re-appointedas our auditors for the coming year. This was accepted by the membership.
RaffleMrs Jones presided over the raffle draw. She thanked the Board andcongratulated them for the very proficient way that they were runningthe business on behalf of the membership. Master James Laniyan drewthe raffle. The winners were: Lorna Brown – £150; Michael Mathura –£100; Icilda Roberts – £100.
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Founder’s closing addressTo commence his closing address, the Rev. Jones acknowledged thepresence of Ministers who had attended the AGM. They were:
Bishop Thomas Pastor Richards
Pastor Curry Rev. Smith
Rev. Akinbobola
and Pastor Hall.
The Rev. Jones welcomed everyone. He thanked the Board for the splendidwork they were doing, but asked them to keep a close eye on spend –reminding everyone that if we are not able to recoup money owed throughthe legal case, this will affect income. He noted, however, that an end tothe litigation will mean no further payments to expensive lawyers.
The Rev. Jones closed the meeting in prayer, after leading the membershipin the hymn, ‘Standing on the Promises’.
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The PCU organisational chartat 1 January 2016
PCUMembership
Board (governing body)
Mr Ganiyu Laniyan (Chair, SMF8)Mr Chona Labor (Vice Chair)
Ms Patricia Toussainte (Secretary)Mr Michael Mathura (Director)
Ms Lorna Lynch (Director)Mrs Tracey Connage (Director)Ms Verona Richards (Director)
Audit Committee
Ann WaughChair of Audit Committee(Non-Executive Director)
MarketingCommittee
Mr Chona Labor (Chair)Mr Ganiyu LaniyanMs Verona Richards
Mr Shane BowesMs Elaine Bowes
RemunerationCommittee
Mr Ganiyu Laniyan (Chair)Mr Michael MathuraMrs Tracey Connage
Ms Patricia ToussainteMr Shane Bowes
Chief Executive Officer
Shane Bowes (SMF8)
Loans & BusinessAdministrator
Lauren Humphris
Executive Assistant
Elaine Bowes
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Dear members We are happy to report another year of success and achievement for thePentecostal Credit Union. We have not rested on our laurels and have beendriving the attainment of the targets and objectives that we establishedto develop the credit union and that are outlined in our Business andDevelopment Plan 2014-2017.
Strategic objectivesGrowth, renewal and improvement are our three strategic objectives upuntil 2017, and we have set challenging targets to achieve these objectivesthat we review and revise each year. After last year’s review, we revisedthe targets to provide greater stretch in the areas of lending, shareholding,and income.
As we reported at the AGM last year, achieving membership growth hasbeen a challenge for us, so we focused particularly on this area and resetthe target to enable attainability but with the stretch necessary. We arehappy to report that, since February 2015, the rate of membership increasehas more than doubled, with an average of 12 people joining per month,as compared with five previously. More recent analysis of membershipshows that this is improving.
Directors’ report to the membership
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MarketingThe dynamism of our marketing strategy is responsible for this improvementin membership. We have adopted and are delivering a multi-facetedmarketing plan, which includes radio adverts, presentations, sponsorshipsand an assertive social media strategy on Facebook, Twitter, LinkedIn andYouTube.
We are building awareness of the PCU in our ‘common bond’ community,developing our profile and initiating fruitful relationships that are leadingto the growth of the business. Marketing is the lynchpin of our growthagenda. Follow us on Twitter, engage with us on Facebook and becomea regular subscriber to our YouTube channel, where we are building animpressive library of video content.
As part of our marketing and promotional work, we will be embarkingon a series of road shows from May 2016 to promote the PCU to thePentecostal faith community. We will be advertising the roadshows shortly,but if you would like your church to be a part of these events, please letus know. Call the office and speak to Shane for more information.
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Improvements in products and services We reported last year on the segmentation research project wecommissioned. This enabled us to talk to a portion of our membersacross all the various profiles –lifestyle, age, gender, economic, domesticand familial circumstances. By doing this, we have been able to groupour membership into segments, so that we can shape the developmentof products and services into the future.
The Digital Age is here and we must upscale our product offering toremain competitive and vital. The results of this research are helping usto do this, as is our membership of the Credit Union Expansion Project –the government’s injection of funds to help build and transform thecredit union sector in the UK. 2016 is the year of transformation and youwill see some evolutionary changes during this year to the products andservices that we offer you.
A new office Many of you will have visited the new offices at Oldridge Road. Majorrefurbishment of the building has provided a contemporary, bright andcomfortable environment from which we can transact our business. It isa huge improvement on the previous office facilities. We now have tworeception areas, a private room for members who wish to discuss theirbusiness confidentially, a Board meeting and training room with a fullyfitted kitchen, in addition to the revamped offices upstairs for the staff.
We are planning an office opening on 14th April, where Bishop DelroyPowell will officiate a service to re-dedicate the building and the creditunion itself to the ministry of providing financial services to thePentecostal faith community in the UK. The Deputy Mayor ofWandsworth, Councillor Leslie McDonnell, will be formally opening theoffice. We also plan to have the office open from 3pm, so any membercan come in, have some refreshments and see the new facilities.
Developing our young people Last year we told you about our plans to establish a Youth ShadowBoard. We think it’s really important to invest in the development of ouryoung savers and we are doing this by setting up a ‘shadow’ Boardmade up of young members aged 11-18 years old. This ‘shadow’ Boardwill not be elected by the membership, but will be able to influence themain Board, by making proposals and suggestions about how we canimprove the way we manage the organisation and the products andservices we provide, particularly to younger people.
We really need to hear more from our younger membership directly. Weneed to make sure that we are developing services that our youngermembers really want, and we encourage more younger people to jointhe credit union. We also want to be able to provide personal andcitizenship development opportunities for our young members, so that ifin the future they would like to volunteer for full Board membership ofthis organisation (or any organisation) they will have the skills to do this.This will be great for their CVs.
To date, take-up has been slow, but we are speaking directly to theparents of our young members to encourage them to join. Please help usto promote this great opportunity to develop our young savers. All YouthShadow Board members have to be members of the PCU. We have someleaflets about the initiative, so take one away with you and promote theinitiative to anyone you think may be eligible to join.
More good newsRule change at PCULast year we asked you to vote for a change to our rules to amend thecommon bond criteria for membership to enable anyone who attends aPentecostal Church in the UK to join – and deleting the familyconnection criteria, and reduce the frequency of Board meetings frommonthly to bi-monthly.
We are happy to report that our submission for the new rule change wasapproved by the Financial Conduct Authority.
PCU Shares This is the title of our new quarterly newsletter. You should all havereceived the March edition. It’s our way of engaging and keeping intouch with the membership. We hope you like the newsletter. We’replanning to have a slot for members to contribute, so send anyinformation or news that you would like to share to [email protected], orcall Lauren or Shane.
Settled litigationWe have settled the high profile legal case that has been the one lesspositive aspect of our operations over the past four years or so. We haverecovered as much of the money owed as we could get – and we stillhave more sums to recover, but the litigation is over and we successfullyproved to the court that the money was owed to the credit union.
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Welcome toour newnewsletterWe hope you like our newnewsletter, which is designed toshare our news, give you lots ofinformation about our services –and invite you to join us as avolunteer.
The newsletter is part of ourtransformation plans for PCU overthe coming year. It will allow us tokeep you up to date and pass onuseful information.
Leslie LaniyanChair of the PCU Board
Bright new office(& new services on the way)The refurbishment of our Balham offices is now complete,giving us a brighter reception area and better spaces forour staff and meetings.
pcusharesMarch 2016
Our newly updated offices reflect theway we’re working to transform theentire business – to provide ourmembers with a modern, accessibleservice that better meets their needs.
On 14 April, we will hold a smallopening event. Bishop Delroy Powellfrom the New Testament Assembly willlead a service to re-dedicate the buildingand the credit union to the ministryof providing financial services to thePentecostal faith community in the UK.
InsideMeet PCU’s staff 2
Church Credit Champions Network 2
Become a PCU Ambassador 3
Involving young people 3
Tips to stay on top of your finances 3
Focus on: Our YouTube channel 4
News from the Pentecostal Credit Union
Before (bottom left) and after (belowand right). Our tired offices are nowtransformed.
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PCU’s 35th Anniversary CelebrationThe great triumph of the year was our 35th Anniversary Celebration on 6June last year. We hosted a gala dinner and gospel show for 300 guestsat the Wandsworth Civic Suite and the event was a resounding success.We sold out the tickets two weeks before the event, and there was awaiting list of people hoping to get tickets up to hours before the show.
We held the event because we wanted to celebrate the great achievementsof this credit union – one of the oldest and financially strongest credit unionsin the country. We wanted to honour the founding members, to mark thehistory and success of black enterprise in the UK, and most importantlywe wanted to promote the credit union, raise our profile and increaseour membership. The event helped to do all of those things and we arestill reaping the benefits of that effort today – in increased awareness ofus and increased membership. Thank you all for supporting us in this.
Regulatory complianceIn accordance with new regulatory requirements, we can inform themembership that the PCU has Fidelity Bond Insurance and Public LiabilityInsurance in place. We are also fully compliant with Single CustomerView requirements and we do not carry out any other additional activitiesother than those that we are approved to carry out.
Our thanksWe must now thank those people without whom none of this would havebeen possible. Our excellent staff team: Shane Bowes, our Chief ExecutiveOfficer and Lauren Humphris, our Loans and Business Administrator, whokeep this business flowing and thriving. We also want to thank HughBoatswain who acted as interim CEO for two years and left us in December.
But most importantly, we want to thank you the membership. Yourcommitment is unshakeable and you continue to provide that pillar ofsupport that we rely on. For this, you have our deepest gratitude and weremain totally dedicated to the governance of the PCU and deliveringexcellent services to you all.
The directorsLeslie Laniyan (Chair), Chona Labor (Vice Chair), Patricia Toussainte(Secretary and Complaints Officer), Michael Mathura, Lorna Lynch, Tracey Connage, Verona Richards, Ann Waugh (Chair, Audit Committee)
March 2016
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Loans report1 October 2014 to 30 September 2015
Month Loans granted (£) Total (£)
October 2014 80,500 80,500
November 2014 141,034 221,534
December 2014 117,799 339,333
January 2015 80,000 419,333
February 2015 65,300 484,633
March 2015 74,050 558,683
April 2015 37,560 596,243
May 2015 95,500 691,743
June 2015 207,471 899,214
July 2015 174,382 1,073,596
August 2015 114,150 1,187,746
September 2015 92,900 1,280,646
TOTAL 1,280,646 1,280,646
IntroductionThe Audit Committee exists to:
1. Safeguard your interests
2. Ensure the Board meets all legal and regulatory requirements, as wellas financial probity
We scrutinise and audit The Pentecostal Credit Union Limited’s (PCU)practices so that they safeguard your interests, treat you fairly andcomply with the law of the land.
We are not part of the Board and operate completely independently ofit; we are what are known in the sector as non-executive directors. Withthe Financial Conduct Authority (FCA), we have a controlled functionstatus. We are here for you the members.
Each financial year, we set out the areas of focus, together with theBoard, based on challenges ahead, listening to members’ feedback,lessons learned from previous audits and new developments in the creditunion sector.
The purpose of the Audit Committee Report is to inform PCU membersof:
1. New internal auditor
2. Results of Internal Audits during 2014-2015
3. Key lessons and emerging trends from internal audits
4. Board’s expertise and effectiveness
5. Audit Plan for 2015-2016
1. New internal auditorThe Audit Committee’s role is to oversee the internal auditor’s work. Theinternal auditor checks the systems and processes, and reports to us –and we, in turn, report this to the Board. I mentioned in the 2015 AGMthat we would be appointing a new internal auditor. Leroy Reid andCompany Ltd, a company with over 34 years’ experience of auditing,won the tender for the work. February 2015 saw the start of our two-year internal audit contract.
2. The result of internal audits during2014-2015
The internal auditor covered 11 areas of operation during the internalaudit for the year 2014-2015. These provided regular scrutiny of thePCU’s areas of operations. They work to an annual plan that ensures thatthe entire business undergoes full scrutiny during the financial year. Theyassess the PCU and score the organisation’s performance against thepolicies and procedures in use. The PCU can achieve one of four ratings(which are illustrated in figure 1, in the appendix).
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Audit Committee report to the AGMOctober 2014 to September 2015
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TABLE 1: Internal Audits – 2014/2015
Audit focus Assessment Board meeting
1. Lending process – Q1 Reasonable assurance 16 January 2015
2. Procurement – building works– Q1
Substantial assurance 16 January 2015
3. Governance & compliance – Q2 Substantial assurance 17 July 2015
4. Lending process – Q2 Substantial assurance 17 July 2015
5. Finance & treasury – Q2 Reasonable assurance 17 July 2015
6. Reconciliation & reviews – Q2 Reasonable assurance 17 July 2015
7. Marketing – Q3 Reasonable assurance 13 November 2015
8. Capital Investments – Q3 Substantial assurance 13 November 2015
9. Governance & management – Q4
Reasonable assurance 13 November 2015
10. Lending process – Q4 Reasonable assurance 13 November 2015
11. Risk management – Q4 Not completed Due February 2016
12. Member information – Q4 Reasonable assurance 13 November 2015
Table 1 below summarises the assessment ratings the PCU achieved overthe financial year 2014-2015.
Seven out of 12 audits have been rated ‘reasonable assurance’. Fourwere rated as substantial assurance. One has yet to be finalised andshould be carried forward into next year’s schedule of audits.
3. Key lessons and emerging trends frominternal audits
In any organisation there are things:
a) They ‘know’ about themselves – eg their strengths.
b) Which are ‘hidden’ to other people (members, business partners, etc)but the organisation knows about them – eg areas for development.
c) Likewise there are ‘blind-spots’ – things they do not know aboutthemselves, but others know about the organisation.
d) There are also ‘unknown’ things about an organisation – things wedo not know and other people partners do not know either.
The Audit Committee through the internal audit process aids the PCU tolearn and grow from audits, feedback, collaboration and discovery. It isvery similar to the model called Johari’s Window – also referred to as a‘disclosure/feedback model of self awareness’, and an ‘informationprocessing tool’ (see figure 1).
Learning from audits commences with the strategic objectives, key risksand expectations of members. We then look at how the PCU goes aboutmeeting your wishes and expectations through the credit union laws andtheir own policies and procedures. We also scrutinise the appropriatenessof decisions in light of the emerging trends and securing a long-termlegacy for the PCU’s current and future members.
The Audit Committee Chair and Chair of the Board of Directors appraisethe Internal Audit reports, listen to management feedback and responsesto the recommendations and consider the challenges organisations ofour size and experience face. With both Chairs quality assuring theprocess, it has helped the PCU to learn from the findings of the internalauditor and make the Board more aware of its blind spots.
Thankfully, the members have a Board of Directors and a managementteam that are open to learning and determined to improve. Improvementshave been made to our marketing strategy as well as to the managementinformation reports that the Board need to make decisions. The PCU isaiming to maintain a substantial assurance rating on its lending process.
4. Board expertise and effectivenessThe Board of Directors have the majority of the right competencies toaddress the company’s short-term and long-term issues, and a strongChairman. Where possible, we contract in specific competencies such asmarketing and strategic business planning. The directors challengeappropriately the management group. The Chair ensures there arethorough discussions and rigorous decision-making at and in betweenBoard meetings.
Overall attendance at Board meetings is 93%. There have been noconsecutive absences. Absences were accompanied by apologies andoccurred because of illness, holiday or previously planned engagements.
One director resigned in November 2015.
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OPEN SELF
Known to bothself and others
BLIND SELF
Unnoticed byself, but known
to others
HIDDEN SELF
Known to self, but not to
others
UNKNOWN SELF
Unknown to self and others
Known to self Unknown to self
Know
n to
oth
ers
Unk
now
n to
oth
ers
Figure 1: Johari’s Window (Luft and Ingham, 1955)
5. Audit Plan for 2015-2016Through discussions with the Chair and CEO, and noting news comingfrom the Association of British Credit Union Ltd, the Audit Committeehas identified the follow areas for review. The new audit schedule for2015-2016 is outlined below and was approved at the October 2014Board meeting.
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TABLE 2: Audit Schedule for 2015-2016
Area Q1Oct-Dec
2015
Q2Jan-Mar
2016
Q3Apr-Jun2016
Q4Jul-Sept2016
1. Business plan implementation ü ü
2. Loans – lending process ü ü ü ü
3. Marketing ü ü
4. Membership ü
5. Provisioning ü
6. Risk assessment &management
ü
7. Segregation of duties ü
8. Treasury management ü
9. Treating customers fairly ü
ConclusionThe Audit Committee has a good professional relationship with theBoard. The Prudential Regulation Authority (PRA) is satisfied with ourwork and I hope you the members are too.
Ann Waugh Chair, the PCU Audit Committee26 February 2016
Appendix 1Each review provides an assessment of the effectiveness of the PCU’scontrols for mitigating key risks.
Figure 2: Internal auditor investment ratings
Assessment rating Definition
Substantial assurance Robust series of internal controls in place designed to achieve the systemobjectives and which are being consistently applied.
Reasonable assurance Series of internal controls in place, however there are some control improvementsthat would assist in ensuring the continuous and effective achievement of thesystem objectives.
Limited assurance The controls in place are not sufficient to ensure the continuous and effectiveachievement of the system objectives.
No assurance Fundamental breakdown or absence of core internal controls.
PENTECOSTAL CREDIT UNION
LIMITED
DIRECTORS' REPORT
AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 SEPTEMBER 2015
FCA REGISTRATION NUMBER
213242
COMPANY NUMBER
IP00006C
PENTECOSTAL CREDIT UNION LIMITED
FCA REGISTRATION NUMBER 213242
COMPANY NUMBER IP00006C
Chief Executive Officer Mr H Boatswain
Mr S Bowes
(Resigned December 2015)
(Appointed December 2015)
Directors Mr G L Laniyan
Mr C M Labor
Mr M Mathura
Ms P M Toussainte
Mrs T Connage
Miss L Lynch
Ms V Richards
Chairman
Audit committee members Miss A Waugh
Treasurer Mr S Bowes
Secretary Ms P M Toussainte
Loans officer Miss L Humphris
FCA requirement Version 2 credit union
FCA registration number 213242
Company number IP00006C
Registered office and
Business address
15 Oldridge Road
Balham
London
SW12 8PZ
Auditors Thomas Westcott
26-28 Southernhay East
Exeter
Devon
EX1 1NS
PENTECOSTAL CREDIT UNION LIMITED
FCA REGISTRATION NUMBER 213242
COMPANY NUMBER IP00006C
CONTENTS
Page
Directors' report 1 - 2
Auditors' report 3 - 4
Income and expenditure account 5
Balance sheet 6
Notes to the financial statements 7 - 12
PENTECOSTAL CREDIT UNION LIMITED
FCA REGISTRATION NUMBER 213242
COMPANY NUMBER IP00006C
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2015
Page 1
The directors present their report and the financial statements for the year ended 30 September 2015.
Principal activity
Pentecostal Credit Union Limited is regulated by the Financial Conduct Authority as a Version 2 Credit
Union. It was established for the promotion and encouragement of regular savings and the creation of credit for the benefit of the members at fair and affordable rates of interest.
Directors
The Principal activity of the directors is to be responsible for the delivery of the business of the
Pentecostal Credit Union and legislative and regulatory compliance. To provide strategic direction to the staff team and to ensure the best interests of the membership are met.
The directors who served during the year are as stated below:
Mr G L Laniyan - Chair
Mr C M Labor - Vice Chair
Ms P M Toussainte - Secretary
Mr M Mathura - Director
Mrs T Connage - Director
Miss L Lynch - Director
Ms V Richards - Director
Non- Executive Director:
Miss A Waugh - Chair of Audit Committee
Statement of directors' responsibilities
The directors are responsible for preparing the Directors' Report and the financial statements in
accordance with applicable law and regulations.
Co-operative and Community Benefit Societies law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the credit
union and of the surplus/deficit of the credit union for that period.
In preparing these financial statements, the directors are required to:
- select suitable accounting policies and apply them consistently;
- make judgements and estimates that are reasonable and prudent;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
PENTECOSTAL CREDIT UNION LIMITED
FCA REGISTRATION NUMBER 213242
COMPANY NUMBER IP00006C
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2015
Page 2
.................... continued
The directors are responsible for keeping proper accounting records that are sufficient to show and
explain the credit union's transactions and disclose with reasonable accuracy at any time the financial position of the credit union and enable them to ensure that the financial statements comply with Co-
operative and Community Benefit Societies Act 2014 and the Credit Union Act 1979. They are also responsible for safeguarding the assets of the credit union and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
Each of the persons who is a director at the date of approval of this report confirm that:
- so far as each director is aware, there is no relevant audit information of which the credit union's
auditor is unaware; and
- each director has taken all steps that they ought to have taken as a director to make themself aware of any relevant audit information and to establish that the credit union's auditor is aware of that
information.
This report was approved by the Board on .................................... and signed on its behalf by
Ms Patricia Toussainte
Secretary
Page 3
INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF
PENTECOSTAL CREDIT UNION LIMITED
FCA REGISTRATION NUMBER 213242
COMPANY NUMBER IP00006C
Independent auditors' report to the shareholders of
Pentecostal Credit Union Limited
We have audited the financial statements of Pentecostal Credit Union Limited for the year ended 30
September 2015 which comprise the income and expenditure account, the appropriation account,
the balance sheet and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom
Generally Accepted Accounting Practice).
This report is made solely to the Credit Union's members, as a body, in accordance with the Co-operative and Community Benefit Societies Act 2014 and the Credit Union Act 1979. Our audit work
has been undertaken so that we might state to the credit union's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the Credit Union and the Credit Union's members as a body, for our audit work, for this report, or for the opinions we
have formed.
Respective responsibilities of directors and the auditors
As explained more fully in the Directors' Responsibilities statement on pages 2 to 3, the directors are responsibile for the preparation of the financial statements which give a true and fair view. Our
responsibility is to audit and express an opinion on the financial statements in accordance with
applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material
misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the credit union's circumstances and have been consistently
applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the
financial and non-financial information in the director's report to identify material inconsistencies with
the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing
the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on the financial statements
In our opinion the financial statements:
- give a true and fair view of the state of the credit union's affairs as at 30 September 2015
and of its income and expenditure for the year then ended; and
Page 4
INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF
PENTECOSTAL CREDIT UNION LIMITED
FCA REGISTRATION NUMBER 213242
COMPANY NUMBER IP00006C
...................continued
- have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice, and with the Co-operative and Community Benefit Societies Act 2014 and the Credit Union Act 1979.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Co-operative and
Community Benefit Societies Act 2014 requires us to report to you if, in our opinion:
- proper books of account have not been kept by the credit union in accordance with the
requirements of the legislation,
- a satisfactory system of control over transactions has not been maintained by the credit
union in accordance with the requirements of the legislation,
- the income and expenditure account or the other accounts (if any) to which our report relates, and the balance sheet are not in agreement with the books of account of the credit
union,
- we have not obtained all the information and explanations necessary for the purposes of our audit.
Shona Godefroy FCCA (senior statutory auditor)
For and on behalf of Thomas Westcott
Chartered Accountants and Statutory Auditors
26-28 Southernhay East
Exeter
Devon
EX1 1NS
Page 5
PENTECOSTAL CREDIT UNION LIMITED
REGISTRATION NUMBER 213242
DETAILED TRADING PROFIT AND LOSS ACCOUNT
AND EXPENSES SCHEDULE
FOR THE YEAR ENDED 30 SEPTEMBER 2015
2015
£
£
£
2014
£
Income
Entrance fees
570
300
Income from loans to members 322,425 352,742
Interest received on investments 69,419 67,327
Bad debts recovered 175,395 -
Sundry income 5,139 1,283
PCU 35th anniversary celebrations income 7,754 -
Total income for the year 580,702 421,652
Administrative expenses
Administration expenses 135,771 194,568
Data processing expenses 6,588 8,876
Fidelity bond insurance 3,934 4,085
Consultancy fees 30,375 33,750
FCA fees 6,712 7,707
Auditors remuneration 8,608 7,530
Other legal and professional 135,407 117,320
Affiliation fees 1,813 1,830
Bank charges 675 359
Bad debt provision (33,788) 383,957
General expenses 473 1,062
PCU 35th anniversary celebrations
Charitable donations - other
35,991
-
-
10,000
Depreciation of assets 16,368 10,971
Total expenditure for the year 348,927 782,015
Surplus/ (Deficit) for the year before taxation 231,775 (360,363)
Taxation 13,884 13,465
Surplus/ (Deficit) for year before appropriations 217,891 (373,828)
There are no recognised gains or losses other than those included above.
All figures included in the income and expenditure account relate to continuing activities.
Appropriations:
Revenue reserve
8
217,891
(373,828)
Dividend 8 (71,040) (104,924)
Total applied 146,851 (478,752)
PENTECOSTAL CREDIT UNION LIMITED
FCA REGISTRATION NUMBER 213242
COMPANY NUMBER IP00006C
BALANCE SHEET
AS AT 30 SEPTEMBER 2015
Page 6
Notes
2015
£ £
2014
£ £
Fixed assets 4 504,340 326,109
Members loans 5 4,508,310 4,649,819
Less: provision for underperforming loans (940,506) (974,294)
3,567,804 3,675,525
4,072,144 4,001,634
Current assets
Prepayments and accrued income 6,709 8,938
Investments 3,684,797 5,619,943
Cash at bank and in hand 1,783,403 164,388
5,474,909 5,793,269
Creditors: amounts falling
due within one year 6 (26,254) (35,537)
Net current assets 5,448,655 5,757,732
Total assets less current liabilities 9,520,799 9,759,366
Net assets 9,520,799 9,759,366
Capital and reserves
Ordinary members shares 7 7,271,640 7,659,769
Junior members shares 7 120,929 118,218
Hold shares 7 190 190
Revaluation reserve 8 297,124 297,124
Social and educational reserve 8 115,409 115,409
Revenue reserve 8 434,913 288,062
General reserve 8 1,280,594 1,280,594
Total capital and reserves 9,520,799 9,759,366
The financial statements were approved by the directors on ................................. and signed on its behalf by
Ms P M Toussainte - Secretary Mr G L Laniyan - Director
The notes on pages 7 to 12 form an integral part of these financial statements.
PENTECOSTAL CREDIT UNION LIMITED
FCA REGISTRATION NUMBER 213242
COMPANY NUMBER IP00006C
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2015
Page 7
1. Accounting policies
1.1. Accounting convention
The Credit Union is registered under the Co-operative and Community Benefit Societies Act 2014. The financial statements have been prepared under the historical cost convention in
accordance with the Co-operative and Community Benefit Societies Act 2014 and the Credit
Union Act 1979 and comply with financial reporting standards of the the Accounting Standards Board.
1.2. Interest
All interest payable and receivable is accounted for on an accruals basis.
1.3. Taxation
Corporation tax payable is provided on investment income at the current rate.
1.4. Tangible fixed assets and depreciation
Depreciation is provided at rates calculated to write off the cost or valuation
less residual value of each asset over its expected useful life, as follows:
Land and buildings - 2% reducing balance
Fixtures, fittings and equipment- 25% reducing balance
Tangible fixed assets are stated at cost less accumulated depreciation.
1.5. Provision for doubtful debts
Provision for doubtful debts is stated after specifically reviewing all loans in arrears. The criteria
used is whether the loan will be repaid within the medium term and whether there is a regular pattern of repayments and is in accordance with the requirements of the Financial Services
Authority.
1.6. Juvenile depositors
Juvenile transactions are included within the financial statements unless specially shown
otherwise.
Page 8
PENTECOSTAL CREDIT UNION LIMITED
FCA REGISTRATION NUMBER 213242
COMPANY NUMBER IP00006C
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2015
.................... continued
2. Auditors' remuneration 2015
2014
£ £
External auditors' remuneration - audit of the financial statements 4,860
4,740
Internal auditors' remuneration - internal audit services 3,748 2,790
In common with many other Credit Unions of our size and nature we use our auditors to prepare and submit returns to the tax authorities and to assist us with the preparation of the financial statements.
3. Tax on profit/(loss) on ordinary activities
Analysis of charge in period
2015
2014
£ £
Current tax
UK corporation tax 13,884
13,465
Page 9
PENTECOSTAL CREDIT UNION LIMITED
FCA REGISTRATION NUMBER 213242
COMPANY NUMBER IP00006C
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2015
.................... continued
Land and Fixtures,
4. Tangible fixed assets buildings fittings
freehold equipment Total
£ £ £
Cost
At 1 October 2014
425,000
36,598
461,598
Additions 182,504 12,095 194,599
At 30 September 2015 607,504 48,693 656,197
Depreciation
At 1 October 2014
112,684
22,805
135,489
Charge for the year 9,896 6,472 16,368
At 30 September 2015 122,580 29,277 151,857
Net book values
At 30 September 2015 484,924 19,416 504,340
At 30 September 2014 312,316 13,793 326,109
PENTECOSTAL CREDIT UNION LIMITED
FCA REGISTRATION NUMBER 213242
COMPANY NUMBER IP00006C
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2015
.................... continued
Page 10
5. Members loans 2015
£
2014
£
Members loan accounts (see below) 4,508,310 4,649,819
Provision for underperforming loans (940,506) (974,294)
3,567,804 3,675,525
Members loans
(including Juniors)
Balances brought forward from last year 4,649,819 4,848,000
Repaid (1,694,927) (1,095,988)
Granted 1,235,805 552,680
Interest charged 317,613 345,127
Loans written off - -
4,508,310 4,649,819
6. Creditors: amounts falling due
within one year
2015
£
2014
£
Trade creditors 12,371
22,072
Corporation tax 13,883 13,465
26,254 35,537
PENTECOSTAL CREDIT UNION LIMITED
FCA REGISTRATION NUMBER 213242
COMPANY NUMBER IP00006C
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2015
.................... continued
Page 11
7. Members shares
(including Juniors)
2015
£
2014
£
Balance brought forward from last year 7,778,177 7,595,426
Shares saved and loans repaid 1,472,732 1,398,131
Dividends paid 71,040 104,924
Shares withdrawn (1,929,190) (1,320,304)
7,392,759 7,778,177
Analysed as:
Ordinary members shares
7,271,640
7,659,769
Hold shares 190 190
Junior members shares 120,929 118,218
7,392,759 7,778,177
8. Reserves Revaluation
reserve
General
reserve
Revenue
reserve
Social and
educational
Total
£ £ £ £ £
At 1 October 2014 297,124 1,280,594
288,062
115,409 1,981,189
Dividends paid - - (71,040) - (71,040)
Appropriation of surplus - - 217,891 - 217,891
At 30 September 2015 297,124 1,280,594 434,913 115,409 2,128,040
PENTECOSTAL CREDIT UNION LIMITED
FCA REGISTRATION NUMBER 213242
COMPANY NUMBER IP00006C
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2015
.................... continued
Page 12
9. Capital commitments 2015
£
2014
£
Details of capital commitments at the
accounting date are as follows:
Contracted for but not provided in
the financial statements
39,269
153,875
The credit union has entered into a contract for improvements to their premises.
10. Related party transactions
Loans can be made to directors, as members of the Credit Union, in the course of business and on the same terms as are available to other members, in accordance with the requirements
of the Financial Conduct Authority.
During the year, Pentecostal Credit Union paid £29,795 (2014: £19,582) in consultancy fees to Mrs E Bowes, mother of Mr S Bowes.
11. Members numbers 2015 2014
(including Juniors)
Members as at 30 September
1,574
1,511
Junior members as at 30 September 29 25
Total 1,603 1,536
The Pentecostal Credit Union is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (FRN 213242).
The Pentecostal Credit Union Limited
15 Oldridge Road, Balham, London SW12 8PL
Phone 020 8673 2542
Email [email protected]
www.pcuuk.com
/pentecostalcreditunion
@PentecostalCU